More aggressive cost cutting will be necessary in the coming years, Credit Suisse CEO Brady Dougan told CNBC Thursday, adding that he expects the financial services industry to continue to operate in a volatile market environment.
The bank is targeting cost savings of a billion Swiss francs ($1.07 billion) by next year with further cuts in the years after that.
"We believe we should be in mode of driving business more efficiently. We have cut 2 billion Swiss francs in the last year and we can take another billion in 2013 and [we have] set further targets for 2014 and 2015. We want to drive that efficiency and we are in a volatile revenue environment and that'll be the case for the industry for some time," Dougan said.
Credit Suisse, which is already in the process of cutting 3,500 staff or 7 percent of its workforce, did not say how many job cuts would be involved to reach the additional cost savings.
The Zurich-based bank reported net profit fell 63 percent to 254 million francs, missing average analyst forecasts for 370 million francs. The quarter was hit by 1.048 billion francs in charges, mainly from it own debt.
Banks can record gains if the value of their debt falls, since it becomes theoretically cheaper to repurchase it, and book losses if the value of the debt rises.
Dougan insisted that despite the headline figure of a fall in profits given the environment the business was "performing consistently."
"We focused on the operating earnings and the fair value on debt distorts the earnings in this quarter and we took measures to strengthen our capital and our debt spreads tightened. It was a good result in a difficult environment and we maintained our client momentum," he said.
Dougan forecast a rise in the banks return on equities despite the gloomy macro-economic picture.
"Our target of 15 percent return on equity is feasible over time and even if we look at the first nine months of this year the costs were related to businesses we were exiting. We think that is achievable [as] we'll get more efficient on the capital side," he said.
The bank, which put aside $325 million in the third quarter of 2011 to settle a U.S. tax investigation, said it could not give any information on when it might reach a deal. It did not see any direct impact on its ability to generate asset inflows.
The Swiss government is negotiating with the U.S. government to try to get investigations against 11 banks dropped in return for expected hefty fines and the transfer of names of clients suspected of evading taxes.
Credit Suisse is selling prime Swiss real estate, issuing convertible bonds and slashing spending, part of a raft of measures announced in July aimed at raising capital by 15.6 billion francs ($16.72 billion) after urgings by the Swiss central bank.
Credit Suisse said it is looking to sell its exchange-traded funds business as part of its restructuring, confirming a recent Reuters report, but said it did not plan further divestments within asset management.
-Shai Ahmed contributed to this article, Follow her on Twitter @shaicnbc